Inventory and Order Management

1. What is the significance of the Shrinkage Rate item attribute?

A. The average loss of material during manufacturing or storage
2. ACME is using cycle counting and the quantity variance approval tolerances are
specified at the cycle count header level, cycle count Class level, and cycle count item
level. When tolerances are set up at all the levels, which tolerance is considered first
by Inventory?
A. Cycle count item level
3. What is true about (alpha) in the Exponential Smoothing Forecast (ESF) method?
A. (alpha) is multiplied by the forecast error to determine the adjustment
4. What are the three necessary setup steps to enable system credit checking on an
order?
A. 1. Define the customer profile so that the Credit check box is selected
2. Assign a credit rule to the order type being used
3. Use a payment term for which the Credit check box is enabled
5. The client uses an external application as the source for cycle counts. What value
should be used for the profile option INV: CCEOI Commit Point to ensure
successful processing of the Import Cycle Count Entries from Open Interface
concurrent program consistently?
A. A number
6.

You are implementing inventory and plan to use Focus Forecasting. Focus
Forecasting assumes that the forecasting method that worked best for the previous
period _____ and _____.
A. 1. Will result from comparing five forecast methods
2. Will be best for the current period

7.

Identify three correct statements regarding customer acceptance setups

A.1. The first step to enable customer acceptance is to set the OM system parameter:
Enable Fulfillment Acceptance
2. The second step of the customer acceptance setup is to define customer
acceptance deferral reasons in the AR revenue management setup
3. Customer acceptance can be enabled at the OM operating-unit level

8. During the requirements-gathering stage, your client states that it wants items
purchased from a supplier to be inspected. The client wants to know at what point
the inventory is available to reserve. When can reservations occur?
A. After the Receipt Line Deliver transaction
9. An inventory organization can be defined as a facility where you can store and
transact items. They can be either physical or logical entities. Select four common
inventory organizations.
A. Item Master
Warehouse
Distribution Center
Manufacturing Site
10. ACME is implementing Inventory in a make-to-order manufacturing environment,
where there is on-hand inventory for 200 different motors. For these purchasable
items, given the proper profile setup, Min-max can automatically create _____.
A. Records in the Purchase Order Requisition interface table
11. Your client wants approvals for Move Orders to occur after 30 days. Based on the
Move Order approval workflow, how would you enter the values for Move Order
Timeout Period and Move Order Timeout Action?
A. Timeout Period = 15, Action = Approve Automatically
12. You are required to transact an interorganization transfer for Item A. Before the
transfer, you must determine and define_____.
A. A shipping network between the organizations
13. Identify three levels at which you can generate cycle count requests and perform
cycle counting under a single cycle count name.
A. For all subinventories
For a specific subinventory
For a selected set of subinventories
14. Which two statements are true regarding Inventory replenishment methods?
A. 1. Kanban replenishment signals are manual.
2. Replenishment counting enables you to perform counts for nontracked
subinventories, and then direct Inventory to check these counts against the
minimum quantities that you have specified.
15. For the profile option TP: INV Cycle Count Entries form to Background processing,
what are the system requirements for it to be effective?

A. 1. The Cost Manager interface manager must be active.

2. The Material Transaction interface manager must be active.
16. There is a region called Inter-Organization Transfer Accounts in the Organization
Parameters form, on the Inter-Organization tab. What is the meaning of the
Payables field in this region?
A. The default general ledger account that is used as an interorganization clearing
account when
17. Which Inventory table stores reservations information generated for sales orders?
A. MTL_DEMAND
18. Which two statements apply to a Physical Inventory Tag as defined by Inventory?
A. 1. It can contain a count for a group of a given item.
2. It is unique for every stock locator/item/lot number/serial number combination
19. You are working on setting up subinventories for the clients organization. The
client wants to call the subinventory DAYTONS-20STOCKROOM. The system does
not let you create this subinventory. What is the problem?
A. The subinventory name cannot be longer than 10 characters.
20. ACME has specified both quantity variance and adjustment value approval
tolerances at the cycle count header level only. The Approval Required option is set
to: If out of tolerance. Inventory automatically approves the actual count entered
when ____.
A. The cycle count quantity entered for an item falls within both the quantity variance
tolerance and the adjustment value approval tolerance
21. A customer is in the process of setting up a warehouse in the Oracle system. The
customer wants the whole warehouse to be a subinventory with the following
requirements: 1) Have bins in the warehouse to store material. 2) Track some highdollar items by quantity and the bin in which they reside. 3) Track low-dollar parts,
such as nuts and bolts, by quantity, but the customer does not want the overhead of
specifying the bin in which they should reside. What would you do to meet this
requirement?
A. Set up the subinventory with Locator Control set to Item Level control; for items that
should be tracked by bin, set Locator Control to Dynamic Entry.

22. ACME attempts the Pick Release process for delivery lines that have been booked.
Which three options are valid?
A. 1. Use the Standard Report Submission process (SRS).
2. Execute Online from the Release Sales Order window.
3. Run a concurrent program from the Release Sales Order window.
23. Company Z has two sites. Both sites are inventory organizations. One is in
Colorado, the other is in New Jersey. Inventory is expected to travel between the
two, in both directions. The following requirements are identical for the two
organizations: a) Ownership transfer occurs upon ship confirm. b) There is a twostep receiving process. c) Only approved orders would be performed. Which setups
in Shipping Networks meet these criteria?
A. Transit Type = Intransit, FOB = Receipt, Receipt Routing = Standard, Internal Order
Required =checked
24. The Exponential Smoothing Forecast (ESF) method should be selected when _____.
A. Both trend and seasonal demand patterns are equal to zero
25. At which level can costing methods, such as Standard Costing or Average Costing
(Moving Average costing), be controlled in an inventory organization? 1. individual
item level 2. subinventory level 3. inventory organization level
A. 3 only
26. An item reserved at the S/N level is associated with ________.
A. MTL_SERIAL_NUMBERS
27. Which three statements are true about ABC Analysis and cycle count Classes?
A. 1. The hit/miss% for the Class overrides the hit/miss% of the cycle count header.
2. An ABC Analysis can be compiled for nonasset (expense) subinventories for which
quantities are tracked.
3. Positive and negative tolerances can be entered for each class, which will override
the tolerance at the cycle count header level
28. Your client wants to ensure that backflush operations can continue even if the
inventory level is driven below zero. At the same time, they want typical inventory
transactions to be prevented from driving inventory levels below zero. Which
configuration meets this requirement?
A. Org Profile option to Allow Negative Balances = No; Profile option for INV: Override
Neg for Backflush= Yes.

29. Which Inventory table stores the item attribute values assigned to a system item?
A. MTL_SYSTEM_ITEMS_B
30. Identify the four statements related to the MOAC functionality.
A. 1. While entering a transaction, the Operating Unit needs to be selected in case the
user wants an Operating Unit other than the default
2. While querying for a transaction, entering the Operating Unit helps the application
to query lesser number of transactions and results in better performance.
3. A new Operating Unit field has been added to all the forms that allow the user to
view and manage Sales Orders and Returns across multiple operating units.
4. A new Operating Unit field has been added to all the forms that allow the user to
view and manage Sales Agreements and Quotes across multiple operating units.
31. Company ABC is using serialization in all organizations that manage inventory. It
wants each organization to determine the proper levels of serial control. The
products in each organization are completely different, so having the same serial
numbers on different products is acceptable. The only global requirement is that
serial numbers be generated in advance, to prevent incorrect serial number types
from being created. Using the table below, choose the cell that represents the correct
parameter and attribute combination to meet Company ABCs needs.
A. B
32. ACME requires cycle counting variance approval tolerances and the Approval
Required option is set to: If out of tolerance. When the actual count falls within
tolerance, Inventory _____.
A. Automatically approves and posts the cycle count adjustment
33. Cycle count variance approval tolerances have been defined for a cycle count. The
Approval Required option in the cycle count has been set to: If out of tolerance.
When an item count exceeds the approval tolerance specified, Inventory _____.
A. Holds the cycle count adjustment for approval and posts it after approval
34. Weight and physical dimensions are examples of ____.
A. An item attribute
35. You are defining the staging subinventory for your sales order pick release rule.
Which flag should be enabled (checked) for the rule to work properly?
A. Allow Reservations
36. In the eTRM Technical Reference, where can you find the workflows associated with
an application?

A. FND data
37. Review the organization structure regarding the inventory organizations (IO) and
sales organizations (SO). The sales organizations would not transact inventory
items. IO 2 would not be used right away, but would be created during the
implementation. What is the minimum number of subinventories required for this
implementation?
A. Five (One for each IO. SOs would not require subinventories.)
38. Which two statements about the Stock Locators flexfield are true?
A. 1. Stock Locators is set up as a key flexfield
2. You have the flexibility to set up segments of the Stock Locators as mandatory or
not mandatory.
39. Which three pieces of information does the eTRM Technical Reference provide
access to?
A. Data dictionaries
Logical data models
Table relationship diagrams
40. What is the purpose of the profile options INV: CCEOI Commit Point and INV:
CCEOI Workers?
A. To set default values for the Import Cycle Count Entries from Open Interface
concurrent program
41. Your client has an item that is used globally. The site in Colorado is evaluating a
local source for the item. The buyer requires the incoming goods from the local
source to be separated from the goods received from nonlocal sources. Which three
actions should be performed to meet this requirement?
A. 1. Create a separate subinventory to stock goods from the local source.
2. Insert a separate subinventory on the purchase order and attach Receiver Notes.
3. Ensure that you do not create an item transaction default for the item in the
Inventory Organization.
42. For performing an ABC analysis, you need to define ABC Compile, ABC Classes,
and ABC Assignment Groups. Identify two correct actions.
A. Link an ABC Compile to an ABC Group.
Assign an ABC Class to an ABC Group.
43. For which type of move order is approval required?
A. Requisition Move Order

44. ACME is implementing Inventory in a Process Manufacturing environment. The

default profile for the min-max planning report is deployed. What will be the result?
A. Requisitions will be pre-approved.
45. The client wants to implement reorder point planning for some items in the
organization. They currently use min-max planninG. What is the minimum amount
of information that needs to be changed on the items the client wants to plan?
A. Safety Stock Quantity, Inventory Planning Method set to Reorder Point, Forecast
Quantity, Carrying Cost, and Order Cost
46. Identify five valid steps in defining a Physical Inventory.
A. 1. Void unused or lost tags
2. Take a snapshot of system on-hand quantities.
3. Approve or reject Physical Inventory adjustments based on approval tolerances
4. Automatically post adjustments to inventory balances and general ledger accounts
5. Define a Physical Inventory for your whole warehouse or subinventories within
your warehouse.
47. What is the purpose of the Physical Inventory Snapshot?
A. To provide the baseline for comparison of physical count quantities against system onhand quantities.
48. What are the prerequisites for performing an accurate ABC Compile for inventory
items using the Current on-hand value as the compile criterion?
A. Both items with on-hand quantity and items costed
49. Available to Promise (ATP) checking can be specified _____.
A. At the component level
50. Your customer decided to use min-max planning for some items in specific
subinventories. You caution him not to include too many customer orders when he
runs the report. What option do you suggest that he include?
A. Demand Cutoff Date